The pandemic has presented enormous challenges for commercial real estate in Canada. Yet, one Winnipeg developer remains undaunted by the difficult economic conditions.
Ironclad Developments Inc. recently began construction of a 153-unit, mixed-use, multi-family low-rise in a fast-growing new community in the city’s southwest. Called Bravado at Bridgwater, the rental apartment complex is located in the heart of Waverley West, one of Winnipeg’s largest new developments that has been filling out over the past several years.
And while the project may seem like it’s off to a bad start with construction getting underway amid the COVID-19 pandemic, vice-president of design and engineering Doug McKay said the firm is confident.
“We’re going to be opening to the market with perfect timing,” he said. The project is expected to be ready for residency in spring 2021, hopefully after or near the end of the health crisis.
Indeed, the company may have reason to be confident.
Multifamily likely to remain strong
A recent report by DBRS Morningstar on the impact of the pandemic on REITs points to a tough outlook for the commercial real estate. However, it noted much of the pain will be felt in retail, hotel and recreational properties. By contrast, multifamily is likely to be the least impacted.
Of course, tailwinds have been building for some time for Canada’s rental sector as home prices have been steadily rising in most markets for more than a decade.
McKay added the federal stress test regulations for mortgage borrowing have also made rental projects more favourable. That’s because many first-time buyers are renting longer, or simply choosing not to buy.
“Overall, the rental market is dominated by either those just getting onto the property ladder and those just getting off it.”
McKay said those getting on tend to be millennials challenged by high housing prices and the stress test. At the same time, demand for rentals is bolstered by empty-nesters seeking to capitalize on the growth in value of their long-time homes.
Either way, he said, these two demographics typically seek rental product featuring a bevy of amenities that often only new builds can provide.
Bravado illustrates this trend with five stainless steel appliances in each suite, large floorplans — including three-bedroom units — and extras like common fitness, business and theatre rooms.
Additionally, the first floor of the building is commercial, opening onto the primary commercial street in the community.
“We’re on the main street of the (Bridgwater) development, which is pedestrian-oriented,” McKay said.
A grocery store is across the street, with other retail and leisure amenities nearby.
Ironclad Developments is busy
Bravado is among Ironclad’s first mixed-use, multifamily developments.
However, since Ironclad’s founding five years ago, the firm has developed, built and, for the most part, continues to operate several successful new multifamily apartments in Winnipeg, Victoria, the Okanagan, Edmonton, Ottawa and elsewhere.
Today. Ironclad is full steam ahead with several project in development. “We’re putting up in the neighbourhood of 1,000 suites per year and growing,” McKay said.
Winnipeg is its key market, and also home to its headquarters (CEO Ryan Van Damme lives in Steinbach, about a 45-minute drive southeast of the city).
McKay cited many recent projects either completed or in development. These include The Onyx on the former location of an old hotel on Pembina Highway, a key thoroughfare.
Notre Terrace in St. Boniface and Urban Square close to the University of Winnipeg downtown are two other multifamily projects among the many Ironclad either has recently built or is currently developing.
He explains further that Winnipeg has plenty of aging rental stock, making it ripe for new builds. To that end. the company’s marketing research showed strong demand for product like Bravado, even with “competitors that aren’t too far away.”
Bravado will stand out from its peers, he adds, taking “the whole game up by half a step” with amenities renters want.
So while the economy may be paused for the next several weeks to months, Ironclad’s focus extends beyond the pandemic.
“There is still going to be tomorrow and someone has to be there,” McKay says. “We’re OK if that someone is us.”